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Here’s what you need to know about the deal.

Jaime Ritter
December 15, 2017

Today, Target announced that it is spending $550 million to acquire Shipt, a same-day grocery delivery service that was founded in 2014 in Birmingham, Alabama. The service currently operates in over 70 markets across the U.S. The acquisition is expected to help Target compete more effectively against other grocery retailers such as Walmart and Amazon.

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Shipt’s founder, Bill Smith, is touting the acquisition, saying in a statement, “Partnering with Target ... allows Shipt to further accelerate our growth, bringing our service to more people, in more markets across the country.”

Users of the Shipt app are able to order groceries from any local store. The service’s shoppers keep in touch with customers via text, so that users are able to help select produce, and shoppers can communicate if there’s an in-store sale, or if an item is out of stock. Target has said it will not restrict the service to its own retail outlets.

However, the company announced plans to make same-day delivery of groceries as well as other Target products such as home goods, toys, and electronics, available at nearly half of its 1,800 stores by summer of 2018.

The deal is expected to officially close by the end of this month.